Why Narendra Modi should announce a mayor for Mumbai

Mumbai is the world’s sixth-largest city, with a population more than several countries, including Australia, or three times the size of London

Ireena Vittal

A file photo of Prime Minister Narendra Modi. Photo: PTI

Newspaper reports suggest that Prime Minister Narendra Modi is likely to campaign for the 2017 elections to the Brihanmumbai Municipal Corporation (BMC). Clearly, running India’s second-largest city matters to Modi’s Bharatiya Janata Party (BJP). A win could strengthen the BJP’s political position with a difficult regional ally, the Shiv Sena. It could also build credibility with 22 million Mumbaikars (and citizens in other cities), if the planned investment of Rs.1 trillion rejuvenates the city, creates jobs and expands incomes.

The incumbents will fight hard to retain control: the city defines their identity and BMC’s mammoth annual budget of Rs.37,000 crores gives them heft. So what could the PM offer that will help his party win in a city of sceptical, apathetic voters (38.4% voted in the last municipal election)?

For one, he could offer a new approach to run the city: an elected political mayor with a tenure of five years, empowered and accountable to fix the city. Why is this needed? For starters, Mumbai is slowly dying and fixing it needs more than investing in a few projects.

It is the world’s sixth-largest city, with a population more than several countries, including Australia, or three times the size of London. It contributes 30% of income tax and 60% of custom duty. Migrants still flock to it, women feel safer in Mumbai than in any other Indian city, and communities come together for everything from Ganesh Chaturthi to street cricket.

Infrastructure is creaking but trains and buses mostly run on time. It also has the most exciting redevelopment plan in India (16.5 acres by the Bohra community).

Yet, the city is in decline, and losing the battle for jobs and capital. Since 1991, while its population doubled to an estimated 22 million, its design has largely remained unchanged, stressing the legacy set-up. With the sub-optimal experiment to create another business district in Navi Mumbai, it remains a north-south city, putting disproportionate pressure on the suburban train infrastructure, increasing transit time for the average citizen and making homes unaffordable. Land use remains static and no new land has been released.

Quality of life has deteriorated with inadequate investment in affordable housing, transport, water, sewage and storm-water drains, especially in the suburbs. The city is routinely hit by flooding, rising pollution and drug-resistant diseases.

Mumbai also seems to have lost some of its appeal due to the high cost of living or doing business. A look at its roster of corporate residents confirms this. While it remains the headquarters of older companies and banks, most start-ups tend to prefer Gurgaon or Bengaluru.

Mumbaikars are also voting with their feet. The island city has seen its gross domestic product (GDP) shrink as talent prefers jobs in suburbs, where they can afford to live, which in turn forces companies to move out of South Mumbai.

So what can be done to save the metropolis?

For starters, there is a critical need for a ‘blueprint’ to improve citizens’ quality of life: projects to improve transportation, resilience and security. Also needed is a plan to renew land use: unlock tracts of government-owned land (such as the Mumbai Port Trust and reclaimed land), design multiple cities within the metropolitan area and tailor floor space index to drive desired density. Indeed, committed citizens and bureaucrats are currently debating Mumbai Development Plan 2034.

There is also a need for an ‘economic’ story to attract investors: articulate Mumbai’s role in the economic growth of India, the kind of jobs it wants to attract and the quality of infrastructure and policies it will offer to de-risk business.

Finally, the new mayor needs to engage citizens (especially the young) and align political parties using a compelling ‘political’ story. This is essential to balance the short-term election imperative (state and BMC elections every five years) with a renewal plan that will bear fruit over 15-20 years.

While the ‘what’ is clear, the ‘how and who’ remain the challenge.

Fixing Mumbai needs a deft, trusted political leader accountable for this renewal. Why? A look at the ‘jobs to be done’ makes this obvious.

To execute this plan, the leader will raise funds (use public land and debt, raise and collect fees for citizen services provided, fight for central and state grants), allocate capital sensibly (finalize projects and sequence them ensuring equity across wards, the rich and the poor) and ensure project execution (create audited books of account, hire private partners and agencies, coordinate across the corporation, re-organize where required).

He or she will need to ‘sell’ this story to investors and citizens. This is not the job for the best of bureaucrats. These officers have short tenures (transfers every 2-3 years), cannot take risks (the spectre of the Comptroller and Auditor General of India) and can get crushed between political parties. Clearly, this job is best done by a political representative of the people, with a clear mandate to make choices on their behalf.

Cities know they need leaders. Global cities elect mayors, some of who eventually run countries (e.g. Indonesia, Italy, and Philippines). Indian law too recognized this via the 73rd and 74th constitutional amendment almost two decades back. Indeed executing this is a state subject.

Some attempts have been made: Kolkata has an effective mayor-commissioner model while Chennai flirted with an elected mayor for a few years and Bengaluru got a city minister last year. But this law remains largely on paper due to missing political will.

Perhaps state leaders are uncomfortable with giving someone control over ‘valuable’ urban land or worry about creating city leaders, even when this might be the best approach for a cadre-led party to create local leadership (as the Chinese communist party realized 30 years back).

So when he campaigns in Mumbai, PM Narendra Modi could take the lead by encouraging state leaders to announce a candidate for the city’s mayor, who would be empowered and made accountable. An owner with a long-term view is the best bet to kick-start the long journey to renew Mumbai. And the PM could win the 2017 battle for BMC and the 2019 war for India.

Ireena Vittal is a former partner at McKinsey & Co. Her areas of specialization include emerging markets, agriculture and urban development.

Ireena Vittal

Source : http://www.livemint.com/Opinion; IreenaVittal

Old News - SoBo Flat Price

South Mumbai high: Rs 100-cr flats

Ten duplex apartments at the under-construction Lotus Villa in the Napean Sea Road area of south Mumbai have been priced at a minimum Rs 100 crore each.

Each square foot of the apartments costs Rs 1 lakh — nearly thrice as much as the per-square foot price of an apartment on the hundredth floor of Dubai's Burj Khalifa, the world's tallest tower. For the price of one Lotus Villa apartment, you could buy about 1,500 low income flats in the public housing project in the suburb of Ghatkopar. Each apartment will have a super-built up area of 12,750 sq ft including a private terrace garden. These castles in the air will be India's costliest apartments, and among the largest on offer in India's financial capital.

Kalpana Shah, Chairman and Managing Director of the Satellite Group, which is building the apartments, declined to comment on the price. However, insiders in the realty business confirmed the rates. "We do not want to announce the prices until the project is launched. But this will definitely be one of the most high-end apartments," Shah said.

Apart from the ones booked initially by investors, most apartments in the 27-odd storey Lotus Villa remain unsold. Shah said she would re-launch the project in April. The building is coming up on an over-one acre plot on which the Morarka Bungalow stood until three years ago. The first 10 floors will be reserved for parking.

Every inch of land in south Mumbai commands astronomical prices. Mumbai's last big-ticket apartment sale took place in 2007, when a flat at NCPA Apartments on Nariman Point went for Rs 34 crore. At Rs 97,000 per sq ft, that is the country's record residential deal so far. The Mumbai-based Satellite Group has over 48 projects including residential projects in Ghatkopar and Goregaon. It also has commercial projects in Andheri and Worli. The Group's then MD, Pankaj Shah, was killed in the 26/11 terror attack at the Taj.

Source : Shalini Nair ; http://www.indianexpress.com

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Four-bedroom SoBo flat sold for 29.5 crore

A flat in the NCPA Apartments at Nariman Point was sold for Rs 29.50 crore on May 16. Flat no 34, which has four bedrooms and a super built-up area of 3,475 sq ft, was sold by Ambuja Cements to RAAS Residence Mumbai Ltd at the rate of Rs 85,000 a sq ft. The flat is located on the third-floor of the sea-facing tower. 

It is not a record-breaking transaction but property trackers said the deal took place at a time when the real estate market is virtually dead in the city. 

In November 2007, when the market was booming, a four-bedroom flat at NCPA fetched Rs 97,842 per sq ft, that is Rs 34 crore. The seventh floor (No 74) pad was sold by Citibank to the highest bidder, a UK-based NRI, who bought the apartment in the name of Record Investments and Leasing Pvt Ltd. Citibank had bought the flat for Rs 2 crore in the early 1990s. 

RAAS Residence Mumbai Ltd is believed to have paid Rs 1.69 crore as stamp duty. However, 50% of the sale amount will be shared equally by the Mumbai collector and the NCPA. It works out to a substantial Rs 13.78 crore. A clause in the NCPA sale agreement stipulates that if a flat is resold, 50% of the profit should go to the NCPA, of which half will be given to the government of Maharashtra. 

"When permission was given to the promoters of the residential building in the 1980s, the government had put in a condition that half the sales proceeds of a flat would be shared equally between the collector and the NCPA. The seller receives 50% of the sale profit while the collector and NCPA are entitled to 25% each,'' said sources. 

In the early 1990s when the building was completed, the original buyer of Flat no 34 had paid Rs 1.94 crore. The latest deal in NCPA is one of the very few which have been recorded at the market price. 

In January last, a similar size apartment in the building was shown to be sold for just Rs 5.9 crore. This is because the seller based the price on the state government's ready reckoner rate, which is way below the market price of the flat. 

It is alleged that many sale transactions in this building are not registered because of the 50% clause. "In the past decade, 13 apartment transfers were recorded and most of them were shown to be based on the ready reckoner rates,'' said a property market source. Three years ago, the then city collector I A Kundan initiated an inquiry to find out whether the NCPA housing society was short-changing the government of revenue by not reporting the sale of flats that have taken place over the past decade. The land on which the 22-storey NCPA Apartments stands belongs to the collector. 

"The modus operandi is to show these flats as company-owned. So, one company will be shown taking over another company along with its assets and liabilities. This way, there is no actual transaction of the flat and hence such sales are never reported to the collector, who has lost out on revenue,'' Kundan had told TOI. The society then wrote back and gave a list of all the apartment transfers that had taken place over the past decade. 

Flats in NCPA are owned by companies and not individuals. The National Centre for the Performing Arts is the promoter of the property. 

The 22-storey highrise, was constructed by Shapoorji Pallonji. In the mid-1980s, when the NCPA was running out of funds, Jamshed Bhabha-who was its chairman-approached the state government for an adjoining plot to construct a high-end residential building. 

The land belonged to the collector and the government agreed to Bhabha's proposal but with one condition that NCPA would have to share 50% of the profits-from the sale of the flats-with the collector. 

Source :  Nauzer K Bharucha,TNN

Mumbai's biggest land owners prove that in a city where space is at a premium, there are vast tracts of land waiting to be developed

Mumbai's biggest land owners prove that in a city where space is at a premium, there are vast tracts of land waiting to be developed

In a city where land is the most coveted acquisition and small apartments command the same price as a house on the French Riviera, it is surprising to see that Mumbai has large tracts of undeveloped land. Several public and private players are large landowners.


Maximum city: An aerial view of SoBo

A recent study by M/S Jones Lang LaSalle, a real estate service and investment management firm reveals that a major chunk of land is in the possession of private landowners and developers. This is followed by saltpan land.

Abhishek Kiran Gupta, head, Research and Real Estate Intelligence Service (REIS) said that data compiled by his team is based on information gleaned by technical experts from all possible land record sources, viz developers, government institutions like Mumbai Metropolitan Region Development Authority (MMRDA), revenue department, collectors office and others.

Private players
Gupta explained that private landowners including industrialists like Godrej and developers like Hiranandani have vast areas of property stretching across the Eastern Express highway and in Powai.

Another major land chunk is the saltpan land in Dahisar, Malvani, Pahadi, Mulund, Nahur, Kanjurmarg, Bhandup, Wadala, Turbhe, Mandale, Chembur, Ghatkopar and other areas.

Sweet is salty
According to senior officials attached to the state revenue department, around 5,442,50 acres of saltpan land are spread across these areas and is under the Ministry of Urban Development, Government of India. If the Centre approves a state government proposal, 5,422,50 acres of saltpan land would be available for redevelopment for private developers. The government though wants to use the saltpans to develop low-cost housing projects for rehabilitating slum dwellers, displaced by various infrastructure upgradation projects.

Gupta added that the third largest property owner is the Mumbai Port Trust, which has a whopping 1,859 acres of land spread throughout the Ports and entire Ballard Estate area.

Mills, not malls
While Mumbai literally changed character when mills shut down and a unique mill culture was wiped off the city's character map, research indicates that irrespective of most NTC mill lands being sold to private developers over time, they still have around 1,377 acres of land spread in pockets of central Mumbai-Parel, Mahalaxmi and other areas.

Land bank
Then, other major landowners are both the Central and State Government institutions like the Life Insurance Corporation of India (LIC), Income Tax offices and others. The Central Bureau of Investigation (CBI) has an open plot of 5,000 sq metres marked at Bandra Kurla Complex. The BEST, BMC and Dharavi slums are a major land bank for the state government.

Railway rocks
Data reveals that both the Central and Western Railway has huge, unused tracts of land in and around Railway premises, that can be developed subject to approval. The RLDA (Rail Land Development Authority) could exploit land in Mumbaiand use one-third of the money profits for projects in the city -- particularly the second phase of the Mumbai Urban Transport Projects (MUTP).

Action stations
According to the senior railway officials just two plots in Mumbai - CST and Bandra could fetch the Railways approximately Rs 5,000 crore that could be used to remodel Churchgate, Dadar, Kurla, Byculla, Bandra and Goregaon stations provided the state government agrees to give FSI to these plots, which could get money flowing. Besides the CST, Carnac Bunder has around 80,000 sq metre land and Bandra East has 45,000 sq metre open plots. Yet, Mumbaikars dreaming of redeveloped railway stations - bigger platforms, better access access to ticketing booths, smooth as silk access and spanking new exits and entrances need to hold those Utopian dreams.

Foreign flavour
"On the basis of these statistics, one can conclude that there is no scarcity of land in Mumbai for development. Yet, there are certain issues like the lands would have to be clear of title, they are not encroached upon and the development norms are clear and stated," said Gupta.

He was also optimistic about Foreign Direct Investors (FDI) looking forward to investing in the real estate market in Mumbai in the near future. Today, though, domestic funds are more active in the real estate industry than foreign funds. Also the real estate market is very strong towards residential projects than commercial ones. Though the developers expect FDIs to invest in commercial projects, FDIs are keener to invest in residential projects, which according to them are more profitable. They are following the wait and watch policy.

Port what?
A study carried out of KPMG in Mumbai Port Trust Land reveals that the Port of Mumbai has historically been the largest land owner in Mumbai city and at one point had owned about 1/8th of the island's area.

According to the report, the port's 1,860 acres of land are contiquous with the land of the city of Mumbai and has now become an integral part of Mumbai. With rapid urbanisation, development and industrial and commercial activities and spiralling population growth, Mumbai has been facing an acute shortage of land. In view of this, it is evident that real estate is one of the key assets of the Mumbai Port and care has to be taken to ensure that its land usage policy is carefully monitored in the future.

Reservation plans
Substantial portions of the land also fall under the reservations planned by the Municipal Corporation under its development plan. As per the reservations scheme, land earmarked for such a purpose is to be used for development of recreation grounds, parks and other public amenities.

City nitty-gritty
The Port has encouraged improvement to the city infrastructure and has played a constructive role by participating in various infrastructure projects and will ensure smooth evacuation from the Port.

Among others, the Mumbai Port has decided to contribute 50 per cent of Wadala Truck Terminus-Mahul Link Road, Mumbai Port has approved in principle, the Mumbai Trans Harbour Link with concessional lease rents of 25 per cent of land and water area.

Recently the port has taken a decision to invest in the Wadala-Kurla dedicated freight corridor, bearing the entire cost of the project. Mumbai Port has agreed to consider MMRDA's proposal for the elevated section of the Eastern Island Freeway through Mumbai Ports estate.

These projects are directly aimed at segregating Port traffic from city traffic and would ease pressure on the city's infrastructure, both for road and rail.

Mumbai Port has played a very useful role in the promotion of the passenger water transport project of the Government of Maharashtra, both on the West and East side of the island city.

Mumbai banega Shanghai? No Singapore
Mumbai will be a world-class city by 2032 and a global city by 2052, states a concept plan for the city, prepared by the state government appointed Singapore-based consulting firm. According to the Project Manager, MTSU (Mumbai Transformation Support Unit), UPS Madan the government has appointed Surbana Consultants International, Singapore to get ready with a feasible report. The entire cost of the project is around Rs. 6.50 crore. 

Apart from the MTSU officials the Urban Development Department, Mumbai Metropolitan Region Development Authority (MMRDA), and the Brihanmumbai Municipal Corporation (BMC) have been roped in.

City of Cities, which is the first of three options of the plan, involves creation of several thematic central business districts (CBDs) in the five growth centres around Mumbai. It also involves rejuvenating existing CBDs and de-congesting them.

The second option -- City of Connection -- is about connecting Navi Mumbai and Mumbai to create a land bank. 

City of Islands, the third option, in the concept plan is about creating endless opportunities by connecting islands in the Mumbai Metropolitan Region (MMR). The concept plan also suggested reclamation of land at certain places in the MMR, including reploriferation of the Thane creek. 

Locked land in Mumbai - Total potential supply of land

Authority/ Owners	Area (acres)	Area (acres) area in sq metres 1 acre = 4046 sq meters
Pvt Owners, developers	6,500.00	2,62,99,000.00
Salt pans	2,177.00	88,08,142.00
Mumbai Port Trust	1,859.00	75,21,514.00
National Textile Corporation (NTC)	1,377.00	55,71,342.00
Private mills	459.13	18,57,639.98
Maharashtra Govt	200.00	8,09,200.00
Central Govt	114.71	4,64,116.66
Western Railway	45.71	1,84,942.66
Central Railway	40.03	1,61,961.38
Total	12,772.58	5,16,77,858.66

Note: Data comprises estimated numbers from non-govt sources

Type	Area in acres
Port and Ports operation area	485.56
Land under infrastructure (roads)	232.55
Mumbai Port Trust staff quarters, railways, hospital and dispensary	273.81
Estate lettings	733.06
Vacant land	64.86
Estate in Titwala	70.15
Total	1860.01

Source : http://www.mid-day.com/articles/

Property rates in Delhi NCR, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad

Property rates in Delhi NCR, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad

Location Name

Minimum Rs. Per SqFt

Maximum Rs. Per SqFt

Mumbai

South Mumbai (Grade A)

50,000

80,000

South Mumbai (Grade B)

32,000

43,000

Worli (Grade A)

25,000

43,000

Worli ( Grade B)

18,500

32,000

Bandra (W)

20,000

30,000

Andheri (W)

12,000

18,000

Goregaon

7,500

10,000

Borivali

6,000

8,000

Ghatkopar

5,000

9,000

Thane

4,000

8,500

Vashi

5,000

8,000

Mulund

5,000

9,500

Powai

6,000

15,000

Bhandup

5,000

7,500

Sion / Chembur

6,000

10,500

Central Mumbai (Parel, Sewri, Byculla etc)

10,500

17,500

NCR

Chanakyapuri

42250

48000

Jor Bagh

42500

48000

Golf Links

42000

46500

Greater Kailash I & II

12000

16500

Defence Colony

13500

20500

Rohini / Pitampura

3500

6800

East Delhi (Mayur Vihar, Preet Vihar, IP extention)

4250

7200

Anand Niketan

15000

24000

Friends Colony (W)

13500

22500

Green Park

11750

18500

New Friends Colony

12500

18000

Janakpuri

4500

7600

Dwarka

3800

6800

Vasant Kunj

6000

10000

Ghaziabad

Old Ghaziabad

1800

5500

Vaishali / Vasundhara- Ghaziabad

2250

3400

NH- 24 - Ghaziabad

1800

2400

Indirapuram - Ghaziabad

2600

3800

Pockets in Gurgaon

DLF Phase 1-4 / Sushant Lok

3500

8200

Golf Course Road - Gurgaon

5000

8000

Extended Golf Course Road / Sohna Road - Gurgaon

2500

5850

Noida

3200

6200

Express Highway - Noida

2590

6500

Greater Noida

1995

3000

Greater Noida (Grade A Only)

3150

6500

Faridabad

Nehar Par- Faridabad

1800

2600

Suraj Kund

3250

5000

Old Faridabad

4000

6000

NH - 2 Faridabad

3700

4500

Pune

Koregaon Park

5800

12000

Boat Club Road

6000

12000

Deccan

7100

8500

Sopan Baug / Uday Baug

3500

5000

Kalyaninagar

5500

10000

Aundh

4000

6500

Hadapsar

2600

5000

Kothrud

3500

5250

Viman Nagar

3200

5500

Wanorie

3000

4500

Kondhwa - Undri

2000

4500

Karve Road

4000

7000

Baner

2800

8500

Bavdhan

3000

4000

Bangalore

MG Road

12000

17000

Koramangala

6500

8000

Indira Nagar

6500

8500

Malleshwaram

5800

8000

JP Nagar

3000

5000

Basavangudi

4500

6500

Rajaji Nagar

3500

5900

Banaswadi

2700

4500

Bellary Road

3000

4500

Whitefield

2300

4500

BTM Layout

3300

5500

Hyderabad

Banjara Hills

5000

7000

Jubilee Hills

5800

6200

Srinagar Colony

4000

5000

Begumpet

3000

4500

Secunderabad

3000

4000

Madhapur

2500

3100

Gachibowli

2200

2800

Kukatpally

2500

3000

Miyapur

2500

2800

Uppal

2000

2200

Chennai

Egmore/Kilpauk

5500

6800

Boat Club

14000

16500

Poes Garden

13000

15500

T Nagar

7300

9000

RA Puram

8000

10000

Ashok Nagar

5500

7400

Guindy

3200

6100

Vadapalani

3200

4800

Anna Nagar

7500

8500

Velachery- OMR Road

2700

3700

Moggapair

3300

4800

Kolkata

Ballygunge

8050

12000

Alipore

7600

10500

South of Park Street

4800

6200

Behala

2000

3000

New Town Rajarhat

2350

3400

Salt Lake

3050

4300

Source : ET; http://latestonrealty.blogspot.in